Caledonia’s US$67 million shaft now fully operational

The shaft has extended Blanket’s life of mine to the current time horizon of 2034.

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HARARE – Mining, exploration and development company, Caledonia Mining Corporation (Plc (NYSE AMERICAN & AIM: CMCL), has announced that its Central Shaft at its primary asset, Blanket Mine in Zimbabwe is now fully operational.

The shaft whose development stages date back to 2015, is a lynchpin for the Company’s gold production target of 80,000 oz per year by 2022, while long-term all-in sustaining costs are expected to drop to $700-$800 per ounce.

Commenting on the announcement, Caledonia’s Chief Executive Officer, Steve Curtis said;

“I am delighted to announce that our new Central Shaft, which is the deepest shaft of any gold mine in Zimbabwe, is fully operational. We can now start to hoist rock, men, and material on a daily basis, which will solve our hoisting constraints and facilitate the planned expansion in mine capacity targeting 80,000 oz of gold production per year.

“Commissioning the Central Shaft has been the culmination of a six-year project costing approximately $67million, all funded through internal cash flow.

“This has been an owner-funded and built project by the Blanket team and I would like to thank everyone for their hard work and especially for achieving the completion of the shaft without any serious accidents, recording only two lost time injuries.”

Caledonia’s gold production during 2020 was 57,899 ounces with approximately 15,012 ounces produced during Q4 2020. Gold production for 2021 is expected between 61,000 to 67,000 ounces.

Key features of the Central Shaft project include:

  • Safety: 1,850 fatality free shifts with only two lost time injuries (LTI); 920 shifts since last LTI;
  • Extended scope: the scope of the Central Shaft project was extended from an initial target depth of 1,089 meters to a final depth of 1,204 meters;
  • Project is self-funded and is owner-built by Blanket crews with supervision from Sinking Engineering Mining Construction;
  • During shaft sinking, more than 1,800 metres of infrastructure development was completed including mid-shaft loading;
  • Capital cost to date is approximately $67 million, compared to initial sinking contractor quotes received of about $100 million;
  • Increased mine-life: the shaft has extended Blanket’s life of mine to the current time horizon of 2034;
  • Increased production: the Central Shaft is expected to increase production by around 45 per cent from approximately 55,000 ounces of gold in 2019 to the target rate of 80,000 ounces from 2022;
  • Reduced costs: economies of scale and operational efficiencies arising from the Central Shaft are expected to reduce the all-in sustaining cost per ounce of gold from $855[1] in 2019 to between $700 and $800 per ounce;
  • Increased exploration: the Central Shaft will provide access for further deep-level exploration which, if successful, may extend Blanket mine life beyond 2034.

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